Tobacco taxes rising in Ukraine; NGO warns against ‘warehousing’

With the new tax rates, prices are expected to rise 12-15 percent, according to Advocacy Centre “LIFE”, an FCA member. However, it anticipates that tobacco companies will try to avoid the new taxes as long as possible.

$US30 million at stake

“We anticipate the tobacco industry will ‘warehouse’ products over the next three months, and the state budget will lose about US$30 million,” said Andriy Skipalskiy, Coordinator of the Smoke Free Ukraine Project implemented by the Centre.

“The government should also take legislative precautions in future to avoid overproduction of excisable goods before the expected excise taxes increase,” he added.

In 2013, Ukraine banned tobacco advertising, adopted 100 percent smoke-free work places, and mandated graphic warnings on tobacco packages. The result was a 10 percent drop in consumption, according to the Centre.